What is performance marketing?
Performance marketing is a digital marketing approach in which advertisers only pay for guaranteed installs, actions, or engagements. Some common examples of conversion points include:
- App installs
- Ad clicks
- In-app events such as purchases and subscriptions
Unlike traditional campaigns in which advertisers pay for impressions, with performance marketing you only pay for what is guaranteed. This strategy ensures that advertisers will only pay for conversion events that accomplish particular objectives. This makes your app install campaigns data-driven, and you only pay for valuable and concrete actions.
Why is it so important?
Performance-based marketing has totally changed the industry as a result of the dominance of digital media. Performance marketing is especially useful for app marketers because it enables them to allocate advertising budgets more effectively, concentrate on niche target segments, and tailor campaigns for in-app events. This means that performance campaigns produce greater returns for each dollar spent on advertising.
Why is it useful to grow your app?
This question may seem redundant to say, of course it is useful to grow your app. But what is important to understand is what exactly are your KPIs when growing your app? Do you plan to increase your revenues through install or in-app events? Is it safer to stick to CPM and CPC or CPI & CPA? And how do you plan to acquire your high- LTV users?
These are the questions we will answer here, with the help of performance marketing.
Top 3 Strategies to keep in mind when focusing on performance marketing
- Select a performance metric that aligns with your objective
There are some performance metrics that every app advertiser must use. For acquiring new users, in-app purchases, retention, and other factors, you must define precise goals. Although the objectives for each app will differ, they should all revolve around one crucial metric: ROAS.
Return on Ad Spend (ROAS) measures how much revenue is generated from a specific app install campaign; it allows to calculate the revenues generated from each dollar spent on app install campaigns and to calculate the performance of digital advertising spend.
It is a function of two factors: CPI (Cost per Install) and ARPU (Average Revenue per User).
First of all, revenue, Customer Acquisition Cost (CAC) and KPIs need to be defined. Then, there are many ways to drive ROAS in user acquisition campaigns, such as the use of A.I. and machine learning algorithms. CPI doesn't always match the CAC (customer acquisition cost) because a new user is not necessarily a new customer. That's why companies need to identify their actual CAC and then compare it to the ARPU in order to assess their ROAS
In addition, acquiring high-LTV users, creating engaging and targeted ads and selecting different geos are key tips advertisers can follow if they want to boost the value of the ROAS.
- Make use of the appropriate performance marketing channels
- Mobile DSPs: Demand-side platforms for mobile ads, often known as mobile DSPs, allow advertisers access to a sizable programmatic ecosystem of mobile ad supply. Real-time bidding (RTB) is made possible by DSPs and is based on particular variables like audience targeting and conversion probability. You can quickly acquire high-LTV users at scale because they employ machine learning to anticipate which consumers will be the most profitable .
- Paid search ads: this form of paid user acquisition guarantees that when a user searches for keywords related to your app, you’ll appear at the top of the results. These ads are typically priced on a pay-per-click basis. Apple search ads within the app store can be effective for app marketers, with Google being the next best bet.
- Social media networks: Social media advertisements can be successful, although prices have recently increased due to competition. In general, it's recommended to steer clear of relying solely on social networks. Take Facebook and Tiktok as prime examples of this phenomenon.
- Mobile ad network: An ad network is a bridge between publishers and advertisers, a platform that manages the exchange of ad inventory between publishers and advertisers in an app install campaign. An ad network collects ad inventory from publishers to find the right match with the advertisers’ needs.
In relation to performance marketing the advantages for advertisers coming from the use of an ad network include the broadening of audience and publishers and, consequently, increased incomes and ROI. This is made possible by the fact that an ad network can provide the most profitable match between publishers and advertisers. Lastly, ad networks are important also because, without them, publishers would need to manually negotiate with each advertiser in each different app install campaign.
- Zone in on specific user segments
It is important to target and acquire the users that you believe will become high LTV-users. In this regard, performance marketing is highly targeted and concentrated in addition to being cost-effective. Modern digital capabilities allow app marketers to target particular audiences through the aforementioned channels. Additionally, they can keep track of user interaction with ads and utilize that information to improve subsequent campaigns.
Specific user groups should be the focus of UA managers in order to maximize these capabilities. Even better, they can forecast new users' app behavior using machine learning. Performance marketing channels often have the ability to target individual personas and "lookalike" audiences, in compliance with the most recent privacy regulations. This is unlike traditional advertisements that may only be able to reach a broad demographic like age or gender. You can customize communications with messages that represent certain interests when combined with digital marketing platforms.
Running performance marketing with Mapendo:
At Mapendo, we specialize in helping apps grow, using a combination of machine learning and performance expertise. We can assist you with running highly optimized campaigns, utilizing the full potential of your data,integrating with the programmatic environment and acquiring quality traffic from the top real time bidding exchanges we are integrated with.
We need only creatives, budget & goals to take your advertising campaigns to the next level and acquire new high-LTV users for your app.
Our tech platform will provide:
- CPI & CPA app campaigns (with fixed payout) run by our team;
- Creative A/B testing
- Customized performance reports (weekly/monthly or whenever you want)
- Target high-quality users and scale volumes with optimization powered by machine learning algorithms
Interested in learning more? Get in touch now